The Green Economy: Assessing risks and opportunities

1. The Green Economy:
Assessing risks and opportunities
Key facts and
findings of the
Green
Economy &
Trade Report

2. Trade in the World Economy
• Trade is a vital element of the global economy
- World exports of goods and services grew at a rate of 5% per year 2000-
2010, amounting to US$ 22.3 trillion in 2010
- Merchandise and commercial services exports share of the world’s GDP
doubled since 1970 up to 29.3% in 2011. In developing countries, this share
reached peaks of 45%
- Trade between developing countries is the most dynamic segment of
global trade in the last decade, increasing from 39.2% of total developing
country exports in 2002 to 50% in 2010
• Greening trade is an imperative of our times
- Expansion of trade → an unprecedented surge in resource consumption
as well as significant increases in GHG emissions. To reverse these
trends, trade must become more sustainable and responsible
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3. Rio+20
• Rio+20 reaffirmed trade as an engine for development and sustained
economic growth. Focus shifted from potential risks of trade protectionism to the
benefits for developing countries when implementing green economy policies
• UNEP aims to help developing countries capture trade opportunities arising
from the implementation of sustainability standards, the integration in sustainable
supply chains, and the exchange of EGS, while ensuring that these measures
are neither used as trade barriers nor as green protectionist measures with
trade partners and multilateral bodies
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4. Green Economy & Trade report
• The report, Green Economy and Trade – Trends, Challenges and
Opportunities, explores the nexus between international trade and the
green economy
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Forests
Agriculture
Manufacturing Tourism
Fisheries
Renewable Energy
Sustainable trade opportunities
Trade related challenges
National capacity

5. Green Economy & Trade report
Sustainable or green trade:
Trade that does not deplete natural resources, harm the environment or
deteriorate social conditions while promoting economic growth
Sustainable trade can be closely associated with the following elements:
• positive social, economic and environmental outcomes from the
international exchange of goods and services
• the generation of economic values
• the reduction of poverty and inequalities
• the reduction of environmental impacts from trade-related economic
activities
• the restoration of natural resources
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6. Current Trends and Opportunities
• Developing countries, and especially LDCs, whose exports are still
dominated by natural resource based products and raw materials, need
to urgently diversify their economies
• While still representing only a small percentage of the global market,
trade in certified products and in EGS is on the rise
• Developing countries are well-positioned to capitalize on the
opportunities to integrate into international value chains for sustainable
goods and services
• The transfer of environmentally sound technologies, through trade
and investment-related channels, also promotes economic and social
development
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7. Economic Sector Analyses
Agriculture • Rio + 20: importance of agriculture for poverty reduction, food
security, livelihoods and achievement of sustainable development
• Green trade opportunities:
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Increased international
competitiveness
Accessing sustainable global supply
chains, particularly
through B2B certification
of sustainable farming practices
new markets from
sustainably produced
crops
Organic
Fair trade
Agro-tourism
Technical and management
Support services

8. Economic Sector Analyses
Agriculture Large multinational companies made sustainability
commitments, which will further drive demand for sustainable
agricultural and fishery products
The organic agricultural market is projected to rise from US$
62.9bn in 2011 to US$ 105bn in 2015. Increasing demand for
sustainable and/or organic products (e.g. organic tea production
increased by 2000% between 2005-2009)
The sustainable and socially equitable development of the Nepali
tea industry is considered to be pivotal in poverty alleviation and
the empowerment of rural women. The Nepali organic tea industry
has the potential to significantly build rural employment. Expected
growth in the overall sector is estimated to be 15-20% annually
Infrastructure and training of workers to comply with Global G.A.P.
requirements improve employment conditions at certified firms
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9. Economic Sector Analyses
Renewable Energy • Rio+20: “the need to address the challenge of access to
sustainable modern energy services for all...[including through]
increased use of renewable energy sources and other low
emission technologies”
• The use of RE could save an equivalent of 220-560 gigatons
of CO2 emissions between 2010 and 2050
• Global market in low-carbon and energy efficient technologies,
projected to nearly triple to US$ 2.2 trillion by 2020
• Developing countries can significantly increase their exports of
renewable energy equipment (e.g. solar panels) and expand
their potential to export electricity from renewable sources
• LDCs face the challenge of having to bridge the digital
divide and technology gap in support of sustainable
development and poverty eradication
• Investing in RE technologies also creates new employment
opportunities. In 2010, more than 3.5 million people worldwide
were estimated to be working, either directly or indirectly, in the
RE sector
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10. Economic Sector Analyses
Tourism • Rio+20 Outcome Document emphasizes that well-designed and
managed tourism can make a significant contribution to the three dimensions
of sustainable development, has close linkages to other sectors and can
create decent jobs and generate trade opportunities
• Tourism generates large export revenues for developing countries and
is a key driver of growth for the world economy (tourists account for >9% of
global GDP, more than one billion tourists in 2012). In particular, tourism is
becoming a significant industry for many LDCs with a direct link to poverty
eradication
• Ecotourism, which focuses on nature-based activities, is the fastest
growing sub-sector of the sustainable tourism industry
• Many developing countries have a comparative advantage in ecotourism, e.g. it is
estimated that sustainable tourism in Nicaragua, a country that prominently focuses on its
culture and natural environment, has an employment multiplier of two. For every job in the
tourism sector, additional local employment is created with higher wages than national averages
• Countries need to preserve their natural environments to be attractive as tourism
destinations
• On 21 Dec. 2012, the UN General Assembly adopted a resolution entitled calling on UN
members to adopt policies that promote ecotourism, highlighting its “positive impact on income
generation, job creation and education, and thus on the fight against poverty and hunger”
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11. Challenges on the Way to Greener Trade
Obstacles such as low levels of literacy, problems in accessing finance, poor
transport services and economic infrastructure, and lack of support by public
institutions, all hinder the ability of producers and service providers to comply with
sustainability certification requirements
The complexity of the requirements that producers and service providers have to
meet to access sustainable value chains. These can include:
• food safety regulations
• sanitary and phyto-sanitary or technical requirements
• regulations governing organic products
• proliferation of private standards
• procurement policies
Compliance with more requirements can be costly, notably for small and
medium-sized enterprises, and can necessitate technologies and know-how that
may not yet be available in developing countries
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12. Enabling Conditions for Greening Trade
I. Within-border supply-side measures, at the country level, to raise the international
competitiveness of sustainable products and services produced by enterprises
• public investment in key economic infrastructure, technical assistance, targeted education and
training programmes, and access to sustainable resources, such as electricity from renewable
energy sources
• green investment = increase employment in the manufacturing sector. Investments
allocated to energy efficiency are expected to create an additional 2.9 - 5.1 m jobs by 2050
• phasing out environmentally harmful subsidies; introduction of pricing policies that include
environmental and social costs of production and consumption
II. Cross-border cooperation to harness the potential for mutually beneficial sustainable
trade among neighboring countries:
• improve physical infrastructure
• improve trade infrastructure, with a focus on trade facilitation of SPS
• promote harmonization and establish equivalences so that national regulatory frameworks
do not become barriers to exports
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13. Enabling Conditions for Greening Trade
III. Matters related to the multilateral trading system to facilitate the beneficial
integration of countries into the multilateral trading system of sustainable
products and services by:
• building awareness and knowledge
• identifying common interests to promote sustainable practices and drive the policy
reforms needed
• consulting and cooperating on practical measures
• encouraging progress in international frameworks, such as the WTO, to help
liberalize trade in EGS, and provide other opportunities for collective action to
address global challenges
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14. Capacity building
The report is a key output of UNEP’s Green Economy and Trade
Opportunities Project (GE-TOP). In the next phase of GE-TOP, UNEP
is committed to assisting governments and other stakeholders in
identifying and creating sustainable trade opportunities, and transforming
risks and challenges into new pathways to sustainable development and
poverty eradication
UNEP will focus on applying the report’s findings, in conjunction with
partners, through quantitative and policy assessments at the national
and sectoral level
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15. Thank You
Giles Chappell, Trade Expert
Economics and Trade Branch, UNEP
giles.chappell@unep.org